Joe Biden and Bernie Sanders have come together to face your student loans.
Here’s what you need to know.
Former Vice President Joe Biden published comprehensive policy proposals yesterday, including for student loan debt, for which he incorporated certain recommendations of Senator Bernie Sanders (I-VT) of the presidential campaign. Biden tackles a host of issues ranging from tuition-free college to student loan cancellation.
Here are some highlights:
Cancel student loan debt
- Sanders proposed to write off all of the $ 1.6 trillion student debt, including federal and private student loans.
- Biden does not support large-scale student loan debt cancellation.
- However, following the Covid-19 pandemic, Biden offered a Covid-19 student loan forgiveness plan write off up to $ 10,000 in student loan debt for each borrower.
- Biden would forgive all undergraduate tuition fees at two- and four-year public colleges and universities.
- Biden would also forgive all undergraduate tuition fees for borrowers who earn $ 125,000 or less per year and who are graduates of a historically black private institution (HBCU) and institutions serving minorities (MSI).
College Tuition Free
- In the 2020 presidential primaries, Sanders and Senator Elizabeth Warren (D-MA) led the fight for a tuition-free college.
- Biden calls for tuition-free two- and four-year public colleges and universities for those earning up to $ 125,000 in annual income.
- Biden would double the maximum price of the Pell Grant.
Public service loan remission
- Biden would forgive $ 10,000 a year in student loan debt for up to 5 years.
- This is a total of $ 50,000 in student loan forgiveness for public servants under the Public Service Loan forgiveness program. This program has faced challenges in recent years, and rejected more than 147,000 borrowers. The US Department of Education recently announced a game changer for student loan cancellation through an easier way to get employer certification.
- The plan applies to those who meet the requirements of the public service, including those who work for qualifying public service and not-for-profit employers.
- Teachers may also be eligible to receive up to $ 50,000 in student loan forgiveness.
- Enrollment in the public service loan forgiveness program would be automatic, and any student loan forgiveness would be tax-free.
- Notably, Biden’s plan would limit the amount of student loan cancellation under this program, which currently cancels all of your remaining federal student loans after 120 qualifying student loan payments.
Student loan repayment
- Like President Donald Trump, Biden wants to simplify the repayment of student loans.
- Biden’s plan calls on borrowers who earn less than $ 25,000 a year to pay no interest on their federal student loans and owe no payments.
- Biden would cap total payments on federal student loans at 5% of discretionary income for borrowers who earn more than $ 25,000 a year.
- After 20 years of on-time payments, borrowers would benefit from an automatic forgiveness of their student loan.
Student loans: Bankruptcy
- While he was a US senator, Biden opposed the cancellation of student loans in bankruptcy.
- Biden now supports allowing borrowers to pay off their student loans in bankruptcy.
- No Garnishment of Social Security Benefits to Pay Federal Student Loans
How to repay student loans
While Biden’s plans are just proposals today, you still need a game plan to pay off student loans. Start with these four options, all free: